Bill Awaiting Governor’s Signature to Delay State EV Fee Until April 1

The initiation of a new electric vehicle fee seems to be experiencing a delay. The fee, part of Act 85, was set to start taking effect on January 1st, to be paid by electric vehicle owners. The PPA supported the initial legislation (Senate Bill 656) which was signed by the Governor in July. Read more here. 

A bill, currently sitting on the governor’s desk, if passed, will postpone the introduction of this fee until April 1st. This delay is expected to result in a loss of approximately $4 million in potential income for the state’s 2024-25 budget, based on an analysis conducted by the Senate Appropriations Committee.

The initial sum set as the fee for the first year is $200 for electric cars and $50 for plug-in hybrid vehicles. Over 100,000 drivers are expected to pay the fee, establishing a necessary source of funds to sustain the expenses of maintaining roads and bridges. These maintenance costs are primarily funded by revenue generated from the gas tax.

In its second year, the fee will rise to $250 for electric automobiles and $63 for plug-in hybrids. This trend of gradual increase in the fee continues over the years.

By 2030, the fee for electric vehicle owners will have risen to $286 annually, with plug-in hybrid owners paying $72. Projections made by state officials estimate that there will be known 87,000 electric vehicles and nearly 53,000 plug-in hybrids on the roads by that time. These vehicles are anticipated to generate around $29 million in fee payments.

Of note is New Jersey’s new fee of $250 for electric vehicles introduced this year, the highest in the country. Despite this distinction, the imposed fee is less than what was initially proposed. The original suggestion, put forward in Senate Bill 656, was for electric vehicle owners to pay a fee of $380. The proposed amount was reduced to $125 by the House of Representatives in April before being increased to $200 in the law’s final version.

The addition of the delay in inducing the electric vehicle fee to House Bill 2177 took place earlier last week in the state Senate. Following this, the Senate gave unanimous approval to the revised bill, after which the House agreed with these modifications later the same Wednesday. The bill is now awaiting signature from Governor Shapiro. The primary focus of House Bill 2177 is to permit yearly safety inspections of motorcycles. At present, these inspections can only be carried out between March and October.